Case Study on the Problems Faced by FindWhat.com
Case studies are custom written at Paper Masters and may be done on topics such as the problems that were once faced by the company FindWhat.com. Business case studies are part of many business and MBA courses. The following are issues to cover concerning FindWhat.com in your case study:
- Industry threats
- Financial viability of the market
- Resource funding for operations
The firm faces a major threat from the attempt by Overture to enforce its patent of a business model that is similar to that used by FindWhat.com, with Overture unwilling to license the use of the business model at terms that would allow FindWhat.com to remain profitable. As a result, the future financial viability of the firm hinges on the outcome of litigation, which is unpredictability. In addition, litigation expenses produce a continuous drain on resources, currently costing approximately $1 million a year or approximately 9% of income from operations.
Acquisition Costs and Fees - FindWhat
The firm also faces an industry wide increase in subscriber acquisition costs that are associated with distribution fees. In effect, the portals and search engines that partner with the firm to provide the actual positioning services for Internet user searchers are demanding a greater percentage of the revenues paid by advertisers. While FindWhat.com does not anticipate that its subscriber acquisition costs will rise as rapidly as those of its major competitors because of its focus on lower tier search engines and portals, they will nonetheless continue to increase, which will put further pressure on the firm’s margins.
Internet Market for FindWhat
The firm is currently not well positioned in the international Internet market despite the global nature of the medium. The international environment is now characterized by the emergence of portals and search engines based outside of the United States as well as increased usage of the Internet in developing nations. Because the technical barriers to entry in the firm’s market niche are relatively low, the failure to position itself in the international market could lead to the long-term erosion of market share on a global basis.